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In a recent roundtable on the topic of engagement, loyalty program leaders agreed that member engagement is low for three main reasons:
1.Use of ‘old school’ plastic cards – while consumers clearly prefer mobile
2.Failure to exploit all available mobile channels for program access
3.Lack of choice among customers on their preferred channel for messaging
These issues are not limited to retail -- they apply across the board regardless of industry.
Given the sheer number of competitive programs available, the quest for consumer attention can make loyalty to any given program quite difficult. On average, most people belong to five different loyalty programs.
It’s clear that an attachment to old school loyalty cards accounts for poor member engagement. A fast food chain in California reported that just 18% of their loyalty cards had been activated in the prior six months, while 44% of cards had remained entirely unused during their entire issuance.
Another problem area facing loyalty program managers is finding the right contact strategies. They might have two or three different ways to contact members, such as email, mobile app and text. The problem is that none of the managers we interviewed were aware of a system to consolidate these various contact strategies into one record for sending out a consistent message.
To make loyalty programs more effective, consumers need to be given a choice for accessing the program using the channel that works best for them, whether that’s via social media, mobile app, text, or email.
Yet loyalty program managers cited how they don't necessarily know the preferred way in which their customers like to be targeted. As a result, they might not be using the right communications channel to reach their most active customers.
What are loyalty program managers doing to address these problems?
Consumers want to access loyalty programs through mobile, however data from the CodeBroker 2017 Mobile Loyalty Survey found that only 18% of people want to use a mobile app. People don't want to download apps if they have easier ways to access programs. Even though downloading and using an app is still effective and worthwhile, it's only a partial solution to address the challenge.
The same survey showed that 43% of people said the biggest hassle was having to carry a loyalty card and retrieve them at POS. About 70% of consumers prefer a mobile-based loyalty card – and better yet, they would use loyalty programs more frequently if they didn’t have to download an app or log on to a website.
But which mobile channel should you pursue? Consumers do not share the same preferences about how to interact with their loyalty programs. Text messages remains the most popular way (35%), followed by using a mobile app (18%). A good 15% of consumers prefer accessing programs using Apple Wallet or Android Pay, followed by Facebook Messenger, a platform that is gaining in popularity. The key message here is that multiple mobile channels must be employed.
Why consider an omnichannel approach to mobile loyalty?
You can acquire new members rapidly and cost effectively by giving consumers an easy way to enroll over their preferred mobile channel, and by giving existing members an easy way to convert to mobile. The research bears this out. Research from EKN’s mobile loyalty study shows 61% of retailers believe the most important element in building a program is being able to make it work across many channels; and average basket size is expected to jump 10% as a result
It’s possible to tackle three key challenges of member acquisition, engagement, and contact strategy via an omnichannel approach: